Huge setback for $2 billion Brookridge redevelopment as OP council rejects public financing request

Roxie Hammill - October 16, 2018 11:36 am
One of Curtin’s original concept drawings for the Brookridge mixed-use development.

Plans to remake the Brookridge golf course into a huge retail, apartment and office development took a stunning setback Monday night as the Overland Park City Council resoundingly rejected a plan for public financing of its first phase.

In a victory for neighbors who have steadfastly opposed the $2 billion development near 103rd Street and Antioch Road, council members said they disliked the STAR bonds and tax increment financing requests enough that they would not devote staff time to develop them further. The vote, taken at a council committee-of-the-whole meeting, was on a plan to allow the city and developer Chris Curtin to fine tune the financing and would not have committed the city to approving it. But council members were unnerved by the risk the city would shoulder to do extensive road improvements, and skeptical of the tourism element promised. They voted down the idea, 8-4.

Curtin left the meeting room quickly afterward, with few words to say. When asked for comment, he said, “Not at this point. Perhaps in the future.”

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For neighbors of the project who have attended many city meetings, the decision was welcome. There was no public comment during the committee meeting, but several held up signs urging the council to Vote No, and applauded enthusiastically when the decision was made.

“We had a nice victory tonight,” said Jan Marie. “For the first time in four or five years the city council members actually listened to the neighbors.”

Neighbor Bob Miller said the decision doesn’t fully settle the problems, though. “Basically what they’ve done is kick the can down the road,” he said. The 140-acre project is in a flood-prone area, and that will be exacerbated by the paving, he said. Neighbors also have objected to the size of the project and its potential to cause construction disruption near their homes for years.

A project marked by controversy and snags

The existing Brookridge clubhouse.

The Brookridge project has been controversial since it was first proposed over four years ago, and has hit numerous snags since. Earlier this year, the council rejected a critical rezoning plan only to come back a month later and approve it, setting the stage for the next step: public financing.

The latest plans for the Brookridge development call for a retail center that would have a grocery store.

Monday’s discussion was only for the first phase of the “Village”, which is the northwestern two-thirds of the project. That part of the project would cost $470 million, with $324 million coming from private financing. The developer asked for $85 million in tax increment financing revenue, with 45 percent of that going to the developer and another 45 percent to the city. The city would then use about $20 million to do extensive road improvements to handle the traffic increase, under the plan.

The STAR (Sales Tax and Revenue) bonds side of the plan was for about $61 million. STAR bonds apply a portion of future sales tax revenue increases caused by the development to some development costs. Tax increment financing uses money that comes from eventual increases in property tax revenue that are brought about by the development.

Council members had major problems with the way each type of financing was set up. At a previous council meeting, objections were raised about a proposal that major street improvements would be phased in. Some residents and council members said they’d prefer to have the streets done all at once, to minimize disruption to the neighborhoods.

But at the time, the developer did not go along because of the up-front cost. The plan Monday night would have allowed the city to split revenue from the property tax increment with the developer so those improvements could be done without the phasing. But then the city would still have to take the risk of making road improvements.

Some city council members questioned the wisdom of that, citing unforeseen circumstances like another recession. They asked for guarantees that the project would be fully built or that the developer would take over road costs if the revenue didn’t come through. Since the increased property tax revenue wouldn’t start for a couple of years, the city would have to carry that cost on its own for a while, working it into its budget for street repairs.

“What if one apartment building is built and nothing else is built and we’ve already put in $20 million worth of streets? That’s the concern. What are you committing to make sure we get our $20 million in TIF back?” said Mayor Carl Gerlach.

‘Business tourism’ idea for STAR bonds met with skepticism

Paul Lyons said Overland Park “simply can’t compete with other cities that already have developed this live-work-play concept around the nation.” File photo.

STAR bonds are a type of financing geared toward building places that will have a tourism draw either regionally or nationally. However the STAR bonds proposal also gave some council members pause. The plan relies on bringing “business tourism” to the area to drive the sales tax revenue. Some on the council questioned the definition of business tourism. They said they were uncomfortable with the idea, since it would be the first time it is used in Kansas. Others wondered what happened to a planned entertainment venue that was part of the original Brookridge plan.

Councilmember Paul Lyons said the city needs to allow tax revenues to finance part of the development because of competition from other cities that already have such developments. “There’s considerable risk involved here, but there’s considerable opportunity and considerable reward if this works out,” he said.

“We simply can’t compete with other cities that already have developed this live-work-play concept around the nation,” he said.

Councilmember Chris Newlin said he was originally enthusiastic about Brookridge but was uncomfortable with the risk of the financing package. “At this point I don’t think it’s worth staff’s time,” to investigate, he said, adding that the city has other infrastructure needs it needs to be thinking about.

The vote does not kill the project. Developers already own all but three houses in the project area and have gotten the area rezoned. “If you vote down moving this forward that does not necessarily meant it will stay a golf course,” Lyons warned. The area will be developed, but without public financing, the city will not have as much leverage about what is built, he said.

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